Needham analyst Gerald Pascarelli initiated coverage on Celsius Holdings, Inc. (NASDAQ:CELH) with a Buy rating and a price target of $38.

The analyst says that as the third-largest player in energy drinks, CELH is positioned to benefit from a healthier category rebound and growing demand for zero-sugar products, creating a favorable environment for revenue acceleration alongside easier year-over-year comparisons.

The analyst writes that while the company recently saw its first year-over-year share loss, they are encouraged by the category's return to a high single-digit growth rate.

If this trend continues, CELH stands to benefit from a healthier market backdrop, easier comps, and upcoming innovations planned for 2025, adds the analyst.

Additionally, inventory optimization challenges appear to be resolving, which should improve alignment between sell-through and reported results.

The analyst estimates full year 2024 revenue and EPS of $1.365 billion and $0.68 and $1.548 billion and $0.93 in fiscal year 2025, respectively.

Last month, the company reported third-quarter earnings per share of $0.00, missing the street view of $0.04. Quarterly sales of $265.70 million (down 31%) missed the analyst consensus of $267.11 million.

Is Celsius Holdings A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Celsius Holdings's page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Celsius Holdings does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 14.2%, you'll need to buy a share of Ellington Residential by the Dec. 31, 2024. Once done, you can expect to receive a nominal payout of $0.08 on Jan. 27, 2025.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Celsius Holdings will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

Price Action: CELH shares are up 0.17% at $27.94 at the last check on Friday.

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